A senior MP on the Treasury select committee has condemned the behaviour of some City bankers after The Independent revealed they had made tens of millions of euros of profit selling extremely complicated financial products known as swaps to public organisations in Portugal.

John Mann called for curbs to be placed on how much banks can charge taxpayer-funded entities for financial products.

He added: “These deals may not be illegal, but they are immoral.”

The Independent's investigation found that Goldman Sachs and Nomura had made huge profits selling the state-owned Metro do Porto bets known as “swaps” which the Portuguese civil servants had hoped would reduce the interest charges on a €126m loan. The swaps went so badly for the Portuguese that the Metro soon ended up owing more on the swap than the total loan itself.

Both banks declined to comment.

Mr Mann said: “The Financial Conduct Authority has placed limits on the total amount of interest and charges that consumers can be liable to owe payday lenders. It is time to look at similar regulations for the City - especially where taxpayers' money is concerned.”

Santander is in the middle of a High Court case in London over swaps it sold Metro do Porto that also ended up costing the state-owned transport group dearly. Santander is demanding to be paid what it is owed. Other banks agreed to a combined settlement last year with the Portuguese government for derivatives contracts including the one highlighted by The Independent. The government paid out approximately €1.5bn in the deal.

It also reached a legal settlement with JPMorgan over contracts it had with state companies.